News Briefs

Loblaw Companies Ltd.'s sales growth is softening as inflation continues to grip the economy and shape consumer shopping habits, the company's president and chairman said Wednesday.

While the country's largest grocery and pharmacy chain sees "a little bit of softening'' with its Joe Fresh apparel brand going forward, what it calls "general merchandise'' or non-food sales outside of clothing are "notably down'' in the most recent quarter, Galen Weston said.

"It definitely had a drag on our overall (comparable) sales results,'' he told analysts during a conference call to discuss the grocery and pharmacy chain's second quarter results.

Several large U.S.-based retailers have warned in recent months about unsold inventory as shoppers rein in spending due to rising costs. Companies like Walmart and Target have suggested profits could take a hit as they are forced to mark down excess inventory.

"The key in this circumstance is inventory. The question is how do you feel about inventory and do you have aggressive markdowns that you need to put through to clear that inventory,'' Weston said.

"The answer is we feel good about inventory and we don't see any meaningful margin risk associated with clearing what's left.''

The company posted an increase in profit and sales in its second quarter, with drugstore sales driving overall margin expansion.

Pharmacy same-store sales increased 5.6%, while pharmacy and health-care services increased 6.1%.

"Right now cough and cold (sales) ... it's like we're in the middle of winter,'' Loblaw chief financial officer Richard Dufresne said during the call.

Weston added: "There's tremendous strength in fragrances. We're kind of wondering what people are doing with all of those perfumes.''

Meanwhile, Shoppers Drug Mart opened Canada's first walk-in clinics staffed exclusively by pharmacists during the quarter, he said.

"We have four consultation rooms, we have four pharmacists and we are seeing patients on a very, very frequent basis,'' Weston said.

"As the provinces get more confident in expanding the scope of practice for pharmacists, we see an opportunity to have selected dedicated locations that can provide a health clinic-like service delivered by pharmacists.''

The pharmacists treat minor ailments, prescribe cold sore medications and offer treatments for strep throat and urinary tract infections, he said.

Meanwhile, the retailer's discount grocery division continues to post strong growth.

Loblaw said its "hard discount'' banners No Frills and Maxi as well as its in-house brands No Name and President's Choice are continuing to benefit from value-seeking shoppers.

Yet there are signs inflation has peaked or will soon, with expectations inflation will moderate in the second half of the year, Dufresne said.

"Commodity price are coming off their highs, some freight costs are coming down and supply chain issues are normalizing _ other than fuel costs, which remain high but down from their peaks of last March,'' he said.

The company said its net income available to common shareholders was $387 million or $1.16 per diluted share, a 3.2% increase from $375 million or $1.09 per share a year ago.

Adjusted profit was $566 million or $1.69 per diluted share, up from $464 million or $1.35 per diluted share in the second quarter of 2021.

Revenues were $12.85 billion, an increase of $356 million or 2.9% compared with $12.49 billion in the prior year quarter.

OTTAWA - Statistics Canada says sales in the foodservice and drinking places subsector increased 3% to $7.4 billion in May, the highest monthly gain since the onset of the pandemic.

The agency says sales at drinking places rose 6.1%, while full-service restaurants recorded a 3.1% increase and limited-service restaurants nudged up 1.9%.

The category of special foodservices, which includes food caterers, food trucks and companies that supply food under contract such as through concessions, cafeterias or airlines, soared 8.1%.

Statistics Canada says each province reported higher sales as most had lifted restrictions by May.

Ontario reported the biggest increase in foodservice and drinking places sales at 3.8%, followed by Quebec at 3.5%.

The agency says unadjusted sales in May were up 62.2% compared with May 2021 and 12.7% compared with May 2019.

The Canadian Food Inspection Agency has issued a recall for several Crave Stevia brand All Natural chocolate products because it may contain milk which is not declared on the label.

The recall covers Crave Stevia Almond All Natural Chocolate, Dark All Natural Chocolate, Mint All Natural Chocolate, Sea Salt All Natural Chocolate and Sprinkles All Natural Chocolate, which were sold in 80 and 85 gram packages.

It also includes Crave Stevia Chocolate Chips in 200 gram packages.

The recalled chocolate was sold in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, and Nova Scotia, and may have been distributed in other provinces and territories.

It was also sold online.

There have been no reported reactions linked to the product.

The CFIA says it is conducting a food safety investigation, which may lead to the recall of other products.

-The Canadian Press

BRUSSELS (AP) - The European Union's executive branch proposed Wednesday a ban on the sale of flavoured heated tobacco products, including some vaping items, as part of its plan to fight cancer.

The European Commission said its proposal comes in response to a significant increase in the volume of such products sold across the 27-nation bloc.

A recent commission study showed a 10% increase in sales of heated tobacco products in more than five member nations, while heated tobacco products exceeded 2.5 % of total sales of tobacco products overall across the region.

The ban would not cover all vaping devices, only those delivering heated tobacco. Many e-cigarettes only contain nicotine.

"With nine out of 10 lung cancers caused by tobacco, we want to make smoking as unattractive as possible to protect the health of our citizens and save lives,'' said Stella Kyriakides, the commissioner for health and food safety.

According to EU figures, cancer is the second-leading cause of death in the bloc of 450 million residents. There are about 1.3 million cancer deaths and 3.5 million new cases per year in the EU.

An estimated 40% of EU citizens will face cancer at some point in their lives, with an annual economic impact estimated around 100 billion euros ($120 billion).

The European Commission previously said it wanted to ensure that less than 5% of the population uses tobacco by 2040.

The ban's proposal now goes to member nations and European Parliament lawmakers for review.

REGINA - A group of Canadian ranchers is calling for an investigation into meat pricing. The Saskatchewan Stock Growers Association says it's asking the provincial and federal governments to look into what it calls an "imbalance'' between the price ranchers receive for the cattle and the price consumers pay at the meat counter. The group says many ranchers and feedlots are operating at a loss this year. Grass is still scarce on the Prairies due to last summer's drought, and the cost of feed grain and fuel has skyrocketed since last year. But packers and retailers are reporting strong profits this year. The Stock Growers say they believe slaughterhouses may be intentionally running fewer shifts to in order to keep wholesale beef prices high and allow fed cattle supplies to build up in the countryside. In the U.S., the Biden administration has already expressed concerns about rising meat prices and vowed to implement policies aimed at increasing competition in the meat-packing sector. According to Statistics Canada, the retail price of beef is up 11.2% year-over-year.

-The Canadian Press

The Canadian Food Inspection Agency (CFIA) is recalling a number of different Enjoy Life brand bakery products because they may contain pieces of plastic.

The recall covers Enjoy Life Soft Baked Cookies in Snickerdoodle, Chocolate Chip and Double Chocolate Brownie flavours, Enjoy Life Chewy Bars — Chocolate Chip and Caramel and Enjoy Life Breakfast Ovals in Berry Medley and Chocolate Chip and Banana flavours.

The affected products were sold in 165g, 170g and 250g packages, with best before dates between Jan. 18 and Mar. 12, 2023.

The baked goods were sold nationally and online.

There have been no reported injuries linked to the products, and customers are being told to either throw them out, or return them to where they were purchased

The recall was triggered by a similar order in another country, and the CFIA says it is conducting a food safety investigation that could lead to the recall of other products.

- The Canadian Press